Facebook's damage limitation drive hits trouble in Germany

BERLIN/FRANKFURT (Reuters) - Facebook’s (FB.O) attempt to limit fallout from a massive data breach hit trouble in Germany on Friday as a privacy watchdog opened a case against the social network and politicians accused its bosses of evasion.

FILE PHOTO: The Facebook application is seen on a phone screen August 3, 2017. REUTERS/Thomas White/File Photo

The social network has been at the centre of controversy over suspected Russian manipulation of the 2016 U.S. presidential election via its platform, and the leak of personal data of 87 million users to a political consultancy that advised Donald Trump’s team.

A German data privacy regulator said it was opening a non-compliance procedure against Facebook in relation to the data leak to the consultancy, Cambridge Analytica, that was exposed a month ago.

The city-state of Hamburg’s Data Protection Commissioner, Johannes Caspar, notified Facebook in writing that he had opened a probe into suspected data abuse. The case could lead to a fine of up to 300,000 euros ($370,000).

“First we will seek a statement from Facebook and then hearings will begin,” said Caspar’s spokesman, Martin Schemm.

Such a fine, if imposed, would only be a pinprick for Facebook, which recorded revenues of more than $40 billion last year.

But the case marks a warning shot ahead of the introduction of tougher privacy rules across the European Union on May 25 that foresee penalties of up to four percent of worldwide revenues for serious violations.

“We remain strongly committed to protecting people’s information,” a Facebook spokeswoman said in response to news of the probe. “We appreciate any opportunity to answer questions by data protection authorities.”

CHARM DEFENSIVE

Facing a hostile audience, a Facebook executive earlier met German lawmakers and repeated apologies by CEO Mark Zuckerberg over the Cambridge Analytica leak.

“What happened with Cambridge Analytica represents a huge violation of trust, and we are deeply sorry,” Joel Kaplan, vice president for global public policy, said according to the text of his prepared remarks.

Kaplan said Facebook would roll out a new ‘view ads’ feature, designed to make political advertising more transparent, in time for a regional election being held in the German state of Bavaria in October.

Social media experts say Germany’s parliamentary election last September was less affected by the spread of ‘fake news’ than the U.S. vote, where Trump pulled off a stunning come-from-behind victory.

Yet the far-right Alternative for Germany (AfD) was able to capitalise on a wave of discontent with an active campaign on social media, winning seats in parliament for the first time as Chancellor Angela Merkel’s Christian Democrats polled poorly.

The Bavarian party closely allied to Merkel’s conservatives is seeking re-election in October. Its leading figure in the federal government, Interior Minister Horst Seehofer, is taking a hard line on immigration in a bid to squeeze the AfD vote.

Lawmakers came away dissatisfied from the closed-door hearing, saying Facebook executives had failed to give clarity on how widespread the illicit harvesting of data using Facebook apps had been.